Confidence in Durban’s business environment continued on a positive trajectory in the third quarter of 2024, with the Durban Business Confidence Index (BCI) rising to 63.01, up from 55.49 in the previous quarter. This marks a year-on-year increase of 41.02%, indicating a renewed sense of optimism in the city’s business environment. These findings were revealed in the latest Durban Business Confidence Index report, produced by the University of KwaZulu-Natal’s Macroeconomics Research Unit in collaboration with the Durban Chamber of Commerce. The report attributes this surge in confidence to a combination of favorable macroeconomic factors.
A stronger rand, which appreciated by 7.07% against the US dollar during the quarter, led to lower fuel prices, reducing operational costs for businesses. Petrol prices dropped by over R2 per litre and diesel by R2.11, easing the financial burden on transport-reliant sectors. Another key factor was the South African Reserve Bank’s decision to lower the repo rate to 8% in September 2024, the first rate cut in 16 months. This move, along with declining inflation, improved access to cheaper credit and bolstered spending power, further uplifting business sentiment. Several sectors posted strong performance gains. The agriculture sector saw business confidence soar by 75%, reflecting a robust recovery. The manufacturing sector also benefited from reduced production costs, with business confidence rising by 23.89%.
Meanwhile, the construction sector experienced an 11.88% quarterly increase, driven by efforts to tackle the “construction mafia”, which has long plagued the industry. Electricity supply, a historic challenge for businesses, showed significant improvement, with only 8.2% of respondents citing it as a concern in Q3, down from 20% in Q2. This consistent power supply has had a positive ripple effect across various industries, particularly manufacturing. Despite these advances, the report noted lingering challenges with service delivery. A notable 73% of business owners expressed concerns about the municipality’s responsiveness to service-related complaints, particularly in areas such as waste management and road infrastructure. Overall, the index report paints a picture of a city on the rise, with businesses benefiting from improved economic conditions. While service delivery remains a challenge, Durban’s business community remains optimistic about the future.
